Credit card issuers are increasing mailings offering premium cards to wealthy consumers, according to new research from Mintel Comperemedia, a Chicago company that tracks direct marketing activity.
In the second quarter, issuers sent 96 million direct-mail marketing offers for premium cards, up 28% from 75 million in the first quarter.
In the second quarter of 2008, issuers sent 119 million premium card offers. Overall in the second quarter of 2009, credit card mailings were down 72%, to 419 million, from 1.5 billion a year earlier.
"For nearly two years now we've seen credit card acquisitions continue to decline," said Andrew Davidson, a senior vice president at Mintel. "So what we are noticing now is that the decline has slowed, but we are seeing growth in the premium card segment."
During the first half, premium cards accounted for one in five, or 19%, of mail campaigns, compared with one in 10, or 9%, a year earlier.
"Issuers are looking to improve their profitability, and premium cards offer the safest bet because they have annual fees," Davidson said. "Issuers can offer higher fees for certain benefits."
Mintel cites such premium cards as JPMorgan Chase & Co.'s Chase Sapphire, Barclaycard U.S.'s Visa Black Card and American Express Co.'s American Express Hilton Honors Surpass Card as examples of industry efforts that aim for the wealthier consumer segment and of cards that offer extra benefits for higher annual fees.
The boost in premium card offers is positive for the industry because it shows issuers are starting to focus on profitability, Davidson said. "This indicates that issuers are starting to branch out and extend offers starting with the most profitable segment," he said. Mintel said it expects that issuers' efforts to offer credit will eventually trickle down to mainstream consumers.